FOR DELIVERY: 9:30 A.M., E.D.T.
FRIDAY, OCTOBER 7, 2005
Advance copies of this statement are made available to the
press under lock-up conditions with the explicit
understanding that the data are embargoed until 8:30 a.m.
Eastern Daylight Time.
Statement of
Philip L. Rones
Deputy Commissioner
Bureau of Labor Statistics
before the
Joint Economic Committee
UNITED STATES CONGRESS
Friday, October 7, 2005
Mr. Chairman and Members of the Committee:
Thank you for the opportunity to discuss the September
employment and unemployment statistics that we released this
morning.
Nonfarm payroll employment was little changed (-35,000)
in September, and the unemployment rate increased from 4.9 to
5.1 percent. September labor market developments reflected
both the impact of Hurricane Katrina and ongoing job market
trends. Over the 12-month period prior to September, nonfarm
employment increased by an average of 194,000 per month, and
the unemployment rate trended down from 5.4 to 4.9 percent.
Before looking at the data in greater detail, I'd like
to briefly review the extraordinary efforts the Bureau of
Labor Statistics, the Census Bureau, and our state partners
undertook to obtain information from our sample establishments
and households in the areas affected by Hurricane Katrina.
The hurricane struck the Gulf Coast on August 29, prior
to the reference periods for our September surveys. The
severity and scope of the damage led us to carefully evaluate
our data collection and estimation procedures. As a result,
we modified some aspects of survey operations and we announced
those changes about 2 weeks ago. We did not alter the concepts
or definitions for either survey. In the payroll survey,
employed persons are those who receive pay for any part of the
pay period that includes the 12th day of the month. Therefore,
people who were on payrolls in the aftermath of Hurricane Katrina
were counted as employed even if they were absent from work. In
the household survey, employed persons include those who are
temporarily absent from their jobs, whether they are paid or not.
To be classified as unemployed, persons must be actively seeking
work and be available to take a job.
In the establishment survey, BLS and our state partners
worked especially hard to contact respondents in hurricane-
affected areas in September. We also modified our estimation
procedures so that businesses that were closed following the
storm, as well as firms that were still operating, would be
better represented in the estimates. In the household survey,
Census Bureau interviewers worked under difficult conditions
to interview sample households in the Gulf Coast. (Interviews
were not conducted in two parishes in the New Orleans area that
were under mandatory evacuation orders.) These extra steps
undoubtedly helped us get a better picture of the national labor
market situation for September.
Turning to the data from our payroll survey, one way to
roughly gauge the impact of the hurricane on job growth in
September is to compare the over-the-month employment change
with the monthly average for the prior year. The change
reported for September--a loss of 35,000 jobs--is about
230,000 less than the average monthly gain over the previous
12 months. Using this simple approach to gauge the hurricane
impact assumes that, in the absence of the storm, employment
growth would have followed its recent trend. To test that
assumption, we constructed a rough estimate of the change
in payroll employment from August to September excluding
all of the sample units in the disaster areas. This exercise
showed that total nonfarm employment would have increased by
an amount in line with the prior year's average. We will know
more about the hurricane’s impact when local employment estimates
become available later this month.
As we look at the official September data for specific
industries, I would note that job losses in the storm-
related areas may have been offset or exacerbated by
developments in the rest of the country. In September,
retail trade employment overall was down by 88,000. There
was a particularly large employment decline in food and
beverage stores (-30,000); much of this decline reflects
industry restructuring and associated store closures
unrelated to the hurricane. In leisure and hospitality, the
job total fell by 80,000 in September, in part due to the
hurricane. There were large losses in food services and
drinking places (-54,000) and in amusement, gambling, and
recreation establishments (-19,000).
Employment in professional and business services
increased by 52,000 over the month, with a large gain in
temporary help services (32,000). The employment increase
in temporary help services for September was more than twice
as large as the average monthly gain for the prior 12 months.
It is possible that some of the September growth was due to
the hiring of workers to assist in post-hurricane recovery
efforts.
Health care added 37,000 jobs over the month, continuing
its long-term growth. Employment also continued to trend up
in financial activities.
In the goods-producing sector of the economy,
construction added 23,000 jobs in September, equal to the
average monthly gain for the prior year. Manufacturing
employment was down by 27,000 in September; much of the
decline reflected a strike in the aerospace industry that
took 18,000 workers off payrolls.
Turning to some of the major labor market indicators
from our household survey, the number of unemployed persons
rose by 270,000 over the month and the jobless rate
increased from 4.9 to 5.1 percent. Most of the increase in
unemployment occurred among job losers. The labor force
participation rate held at 66.2 percent in September.
In summary, payroll employment was little changed in
September, and the unemployment rate rose to 5.1 percent.
It is clear that Hurricane Katrina adversely affected labor
market conditions in September. However, we cannot quantify
precisely the overall effects of the disaster and its
aftermath on the September employment and unemployment
figures. We hope to get additional insight as more data
become available.
My colleagues and I now would be glad to address your
questions.